SolarCity announces layoffs, cuts executive pay to $1

Source: By Allana Akhtar, USA TODAY • Posted: Friday, August 19, 2016

On Wednesday, SolarCity Corporation said it would cut operating costs, including slashing its chief executive’s salary, to bring expenses in line with its reduced solar installation outlook. The company said Chief Executive Officer Lyndon Rive and his brother, Chief Technology Officer Peter Rive, had asked to have their annual salaries reduced to $1 from $275,000, as part of the company’s cost-cutting plans. Earlier this month, San Mateo, California-based Solar City said it accepted Tesla Motors Inc’s $2.6 billion buyout offer. Earlier this month, SolarCity cut its 2016 installation forecast for the second time, citing lower residential bookings in the first half. The company said late last year that it would slow its pace of growth to focus on generating cash. Investors have punished the company’s stock, sending it down 60 percent since December. Wochit

SAN FRANCISCO — SolarCity, the solar panel company that Elon Musk’s Tesla Motors plans to buy, will take up to $5 million in charges to cover planned layoffs, it said late Wednesday.

It’s also cutting the salary of its two co-founders to $1.

The San Mateo, Calif.-based company, in a filing with the Securities and Exchange Commission, said it is cutting operating expenses to match lower guidance for solar panel installations than previously expected. SolarCity did not reveal how many positions it would cut, but expects to incur restructuring charges ranging from about $3 million to $5 million, consisting primarily of severance benefits, it said.

Earlier this month, SolarCity said it plans to install 900 to 1,000 megawatts of rooftop solar panels in 2016, down from its previous guidance of 1,000 to 1,100 megawatts due to low residential bookings. It is not profitable.

SolarCity also reduced salaries of its two co-founders – Lyndon Rive, CEO, and Peter Rive, chief technology officer – to $1 from $275,000 per year as of August 16.

“We fully expect to grow again in 2017, but we must reduce costs in the short term to be in a position to do so,” Kady Cooper, a SolarCity spokeswoman, said in a statement to USA TODAY.

The company had 15,000 workers at the end of last year.

SolarCity (SCTY) shares were down slightly to $23.59 on Wednesday and unchanged after hours.

Musk, chairman of SolarCity and cousin of the co-founders, announced Tesla’s plan to buy the company in June. At the time, the visionary CEO and co-founder of PayPal touted the deal as a “no brainer” that would help solve the earth’s climate change problem. The two companies reached a formal, $2.6 billion deal earlier this month. But analysts have been wary.

“We see benefits from a combined solar/storage offering and manufacturing efficiencies, but remain concerned about cash flow and capital needs,” S&P Global Market Intelligence analyst Efraim Levy told USA TODAY earlier this month.

SolarCity leads all other solar panel companies in the U.S., accounting for 34% of home installations, according to GTM.